[ 蘇冉 ]——(2005-4-5) / 已閱24249次
Foreign Business in P.R.C and Singapore (They are APEC members)
P.R.C Singapore Remarks
Economy
Socialist Market ;
Developing country Capitalism ;
Developed Country
Nonaligned Policy Socialist Market offers free trade opportunities under governmental macro controls while capitalism is based on free trade market
Business Environment No 1 in Asia ;
ASEAN member Improving with great potentiality Both of the two countries are building good business environment. On my opinion, the situation in Singapore is better at this moment.
Foreign Investment Policy FTA with US;
Absolutely openmarket to the world; Limited open market under governmental macro controls P.R.C has decided to open its market step by step, and give foreign investors more benefits in the future. Meanwhile, Singapore is the only Asia country to have made FTA with US.
Tax 30% 22%
Market Large
Most potential Small
Already explored P.R.C has the largest population up to 1.3 billion while Singapore only owes 2.8 million.
Social Economic Problems Local Protection;
Low GDP ; Difficulties in Economy Rebound mechanism More complicated society, serious local protection and low GDP about $400 harm Chinese software market.
Issue Ⅵ: Conclusion and Suggestions
In respect of those issues analyzed in the above paragraphs, it’s apparent to maintain the common senses and divergence between P.R.C and Singapore. But, whatever country a new software company chooses, there’re still some formal and likely steps to follow:
(ⅰ) Decide your first investment place This is the chief issue for you to decide first. Suppose you’d like to set up your company in P.R.C, indicated from TableⅠ, I think you’d like to locate your company in Shanghai to avoid the most software piracy of Guangdong Province. Because Shanghai is the most international city in P.R.C, ranks No.1 in economic field and serves as the open-window to the world. Later, having made your steady foundation, you could diffuse your eyesight to other regions in China. That may be a good way somewhat. For another thing, Singapore is just a centralized city, so there’s no use to care about the location.
(ⅱ) Decide which company models you’d like to take: Joint Venture or Foreign-owned The two models are quite different from each other both for the process of establishment, the legal protection and taxes. Sorry, I didn’t obtain any successful samples for small foreign-owned software companies in P.R.C yet. Maybe you will be the first one. As for Joint Venture, here is a triumphant experience from Microsoft. To conquer the most painful piracy, Microsoft has not only worked with local partners like China Mobile, China Unicom and Sinopec, while also signed strategic partnerships with three domestic software companies: CS&S, Powerise, and Digital China, to win customers in key industries where domestic companies are strong. On the consumers' side, it teamed up with almost all computer makers in China to bundle its operating systems with computers. Another advantage for joint venture is their familiarity with domestic market, policy, and the governmental support. So, I believe that you may benefit more by making a joint venture with local companies. No matter what decision there is, foreign companies need to obey the Foreign Trade Law. But for what I’ve known in Singapore, there’re two separate tax system, of which Foreign-owned company charges lower 5% than Joint Venture one. Many famous software firms like Bentley, AutoDesk ,Adobe and Symantec, etc, chose to enjoy foreign-owned type there, for tighter control, the whole management, less consumption, less complexity with domestic firms, and Singapore’s preferable tax.
（ⅲ）Register the Software Copyright Notwithstanding both Copyright Law and Computer Software Protection Rules don’t require the registration of copyright in P.R.C and Singapore, it’s indeed meaningful somehow. Basically, the official document by Copyright Registration Centre is the original evidence of your copyright. Once you receive a lawsuit on piracy or copyright disputes, you will be easier to proof your copyright. Besides, formal periodical report is a good advertisement of your products, so that, you could upgrade your software’s reputation more quickly. If you want to register your products in P.R.C and Singapore, you should prepare all the required materials ready, and then go to the Centre while submitting necessary fees. In fact, a few days later, you could see your product announcing in a bulletin both in paper and on the official website。
（iv）Use Special way to enter market “Defeat someone by a surprise action.” For large firms have own a major portion of current software market, new small entrants should change in respect of increasing Internet usage and related commercial practices. You can frequently distribute your programs through “virtual” methods. (from a distance over the Internet and through other alternatives to sales of physical CD-ROMs). It will bring lower costs of distribution while giving you more direct contact with the customer. In the end, you should have an excellent service system. The more satisfactory it is , the more benefits.
To sum up, having adopted “Dual Channels and Coordinated Operation” mechanism, characterized by both judicial trail and administrative protection, China and Singapore are good options for foreign software investors. With respect to distinct legal fundamentions, Singapore and China enjoy separate legislation and implementation of software copyright protection. No matter how different, they’re all willing to strengthen their copyright protection system and increase foreign software investments. Because every coin has two sides: advantages and disadvantages. As far as I’ve learned, your main concern is to find a country with better software copyright protection as well as satisfied investment environment. In other words, it is the focus that has a free market for capital. As a matter of fact, for the functions of APEC , P.R.C and Singapore has begun to share more and more business exchanges frequently. Therefore, every foreign company could still get profits from the regional business in the two countries. Even a company has located in Singapore, it doesn’t mean to give up Chinese market .I think there’s no contradiction to obtain the profits from the two countries at the same time. The core issue is which country would like to benefit you more as a new entrant. For the view of my thoughts, Singapore acts more likely as your better choice for its special relationship with US, better capital infrastructure, more liberal human resources practices, adequate power, a good fiber optic network, and last but not least, a well-educated population, Singapore already has the basic hardware infrastructure to support its own version of Silicon Valley. Finally, as its leading position in ASEAN, a company would probably get as many profits as possible from other economic regions for their non-barrier business.
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